Tag Archives: economic data

If It’s The Economy…

The “Big Lie” has worked so well with the GOP base (polls show some 58% of Republicans believe that Trump really won the election) that they’ve extended the tactic. If James Carville’s famous 1992 motto–“It’s the Economy, Stupid” was right, then lying to an astonishingly credulous  base  about the economic performance of the Biden Administration should be a no-brainer.

Granted, the criticism bears virtually no relationship to reality, as a slew of economists routinely document and as Jennifer Rubin recently pointed out in the Washington Post. But facts are clearly irrelevant to Republican party “leaders” who insist–in the face of millions of deaths worldwide– that COVID is a hoax. Also that California’s wildfires were set by Jewish space lasers, and that Democrats eat small children.

The 64-Thousand-Dollar question, of course (young people, Google the reference…) is whether Carville’s insight was right. Do verifiable economic facts on the ground influence voters, or is misinformation being sold by politicians with an ax to grind a more potent motivator?

Rubin begins by reminding readers of the success of the stimulus.

Quite simply, stimulus packages kept the economy and workers afloat during the pandemic, setting the stage for an economic surge when employees could return to work. The Post reports, “The U.S. economic recovery from the covid pandemic was the strongest of any of the big Western economies. That is in large part thanks to the multiple rounds of government stimulus that totaled at least $5.2 trillion.”

Without a single Republican vote, Biden passed an economic plan that, coupled with the Federal Reserve’s near-zero interest rate policy, proved to be precisely the recipe needed to help stave off a long-term recession. The Post reports, “The Biden stimulus pushed the bank accounts of even the lowest-income Americans to unexpected heights. On average, they had more than twice as much in their savings accounts as they did when the pandemic began.”

The effects of the stimulus are only a part of the story. The job market–responding to pent-up demand–is more favorable than it has been in a long time. Unemployment is 4.2 percent, and according to The Wall Street Journal, applications for unemployment benefits, a proxy for layoffs, have trended near five-decade lows. Jobless claims are at the lowest level since 1969.

Perhaps the best news is that workers — especially low-wage workers — have been the biggest beneficiaries of this surprisingly robust economy. Rubin quotes Steven Ratner, who noted that, as the economy rebounded from the pandemic,

the size of wage increases began to recover, especially for less-well-off Americans, in part because of increases by some states in their minimum wages. The many Covid-related federal stimulus programs helped push the growth rates in pay for many workers to levels not seen since the early 2000s. Thanks in part to these programs, wages are growing fastest for the bottom 25 percent of workers.

Rubin notes that this data contradicts Republican’s longtime insistence that wage increases mean fewer jobs–an insistence increasingly at odds with that pesky thing called “evidence.” Not only that,  the past year has seen some notable successes in unionizing, allowing American workers to demand both higher wages and better working conditions.

If Rubin and multiple economists are correct, what accounts for the evidently widespread belief that economic times are bad? Paul Krugman asks–and answers–that question.

Overall the economic picture looks pretty good — indeed, in many ways this looks like the best economic recovery in many decades.

Yet consumers appear to be feeling very downbeat — or at least that’s what they tell surveys like the famous Michigan Survey of Consumers. And this perception of a bad economy is clearly weighing on President Biden’s approval rating. Which raises the question: Are consumers right? Is this a bad economy despite data showing it as very good? And if it really isn’t a bad economy, why does the public say it is?…

One clue is that there’s an incredible amount of partisan skew in the responses. Republicans say, bizarrely, that current economic conditions are much worse than they were in March 2009, when the economy was losing 800,000 jobs a month…

Another clue is that you get very different answers when you ask people “How are you doing?” rather than “How is the economy doing?” The Langer Consumer Confidence Index asks people separately about the national economy — where their assessment is dismal — and about their personal financial situation, where their rating is high by historical standards.

So–the midterm elections will give us a clue to the proper interpretation of Carville’s axiom. Will people vote their personal economic situations? Or will they vote the faux reality peddled by their political cult?

I guess we’ll find out.